Mr. Ackman wants General Growth, based in Chicago, to consider selling itself for what he expects would be a big premium. For its part, Brookfield prefers to stay the course and focus on improvements to the company's 133 U.S. malls, which include flagships Ala Moana Center in Honolulu and Grand Canal Shoppes in Las Vegas.

ENLARGE

The Grand Canal Shoppes in Las Vegas, one of 133 U.S. malls owned by General Growth Properties.
Getty Images

The bickering is escalating. In a report this month, Mr. Ackman questioned Brookfield's motives for not supporting a sale and said its plan wouldn't be good for minority shareholders. Brookfield Chief Executive officer Bruce Flatt countered in an interview that Mr. Ackman's assertions are "entirely wrong."

Both owners have already made enormous profits on their investments. For Brookfield, which owns a 42% stake in General Growth including warrants, the $3.5 billion it invested in General Growth since 2009 has more than doubled in value.

Mr. Ackman invested about $60 million in 2008 and 2009 for what is now a 10% stake worth roughly $2.2 billion, including his holdings in two General Growth spinoffs.

Brookfield, based in Toronto, has a leg up on Mr. Ackman thanks to its larger stake and three executives on General Growth's nine-member board. Last month, the board rejected Mr. Ackman's request that it hire strategic advisers to help weigh a sale. It did, however, hire law firm Anderson, Potter & Corroon LLP to advise it on corporate governance in the matter.

But few expect Mr. Ackman, a veteran of corporate scuffles, to go away. Among the current holdings of his Pershing Square Capital Management LP hedge fund are Procter & Gamble Co. and J.C. Penney Co.

Mr. Ackman amped up the pressure earlier this month by releasing a 102-page document titled "Incentives Matter," attacking Brookfield's efforts to take "de facto control" of General Growth by using its clout as a 42%-owner to block suggestions to consider a sale. The report warned that "Brookfield-controlled entities historically trade at a discount" and that "Brookfield's checkered track record with minority shareholders is cause for alarm." He didn't respond to requests to comment further.

The report challenged Brookfield's plan to later this year spin off its stake and its other commercial real-estate investments into a company, to be called Brookfield Property Partners, that the parent company will manage in exchange for fees. Mr. Ackman alleges that Brookfield will avoid selling its General Growth stake to instead continue collecting those fees, since some are based on increases in the value of Brookfield Property Partners' holdings.

Mr. Flatt disputed that in an interview. He said if General Growth were to be sold, Brookfield's proceeds would remain within the Brookfield Property Partners spinoff, meaning that any fees Brookfield collects for managing the spinoff wouldn't decrease. Even so, those fees are dwarfed by the gains that Brookfield can reap by boosting the value of its spinoff, either by selling assets or by improving their market value, he said.

"It's absurd that anyone would think that the fees are relevant as opposed to our $11 billion," Mr. Flatt said, referring to the value of Brookfield's holdings to be included in the spinoff.

One potential buyer of General Growth would be Simon Property Group Inc., its largest rival. Simon tried to buy General Growth out of bankruptcy in 2010, but lost out to the recapitalization plan championed by Brookfield and Mr. Ackman.

Then, last year, Mr. Ackman met with Simon chief executive David Simon to discuss a possible sale of General Growth. Ultimately, Simon and Brookfield couldn't come to terms. Simon executives have said in the past two months that the company isn't pursuing General Growth.

Meantime, Brookfield and Mr. Ackman are both pointing to General Growth's recent performance as evidence that their strategy is best for shareholders. Brookfield executives say that General Growth has boosted its malls' occupancy, refinanced its debts and increased its lease rates since exiting bankruptcy in November 2010 and can continue to do so.

But General Growth continues to lag behind Simon and its other large rival in the mall business, Taubman Centers Inc. For example, this year General Growth's net operating income has increased 4.1%, compared with 5.6% for Simon and 8.8% for Taubman, according to Green Street Advisors.

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